Monday, October 6, 2014

Problems with Clean Energy

As much as we dislike paying taxes, that's the cost of living in a civilized world.

Last week, I heard a piece on NPR about solar power. The teaser was that Pennsylvania regulators are putting a limit on how much power a homeowner can generate with solar panels.

"Why would we want to limit clean energy?" asked Vera Cole, the president of the Mid-Atlantic Renewable Energy Association.

Her question confused me. First, because the her name is Cole, which is, ironically, pronounced exactly like coal on the radio broadcast. And, second, it sounds like she has an obvious point. Her question sounds like someone (big oil) is overtly protecting their turf and power. But the truth is a little more complicated than that.

The bottom line is that Pennsylvania regulators want homeowners to generate no more than 110% of the power they need. The reason is that the excess power generated by homeowners is sold back to the power utility. The power companies aren't equipped to handled consuming power on a large scale. If too many people generate excess electricity then the power utility can't collect enough money to maintain a reliable electricity grid. Imagine if too many people, in too short of a time, generated more electricity than the power company could handle; to the point that the poorest of Pennsylvania homeowners, the ones who couldn't afford solar panels, couldn't afford electricity from the grid?

Utilities are highly regulated. Your local water or power company can't arbitrarily raise prices. They're not as nimble and flexible as, say, a high-tech company.

Cole's question does raise an important point. The power company does need to begin planning for redistributing electricity. Wouldn't be great if power companies became redistributors of electricity from private individuals, instead of coal-buring creators of it?

So, my point about taxes is that governments need to match up funds collected with expenses. This is important as we explore more energy alternatives. Taxes on gasoline are a big portion of the price we pay at the fuel pump. Those taxes go to repairing our roads. What happens when more and more people find alternatives to use fossil fuel powered cars? I'm not suggesting that we should slow the switch from gas to renewable, clean, energy. But, we need to think about alternative sources of tax revenue. I'm actually a fan of big government, but it has to be efficiently run by effective people.